Picture a condominium investment where you can pool the rental income with other owners and share some or all of the expenses. Well, that’s how rental pools work. They give you the option to amalgamate a group of rentals into one financial portfolio and then split the costs and income in equal portions. This type of investment ensures owners a monthly income regardless of turnovers, economic factors, and other variables.
Braden Equities Inc. offers a full-service rental pool management program. This means that you can leave all the daily tasks that come along with being a landlord to us and take more time to focus on the important things in your life.
There are a variety of monthly fixed costs that the rental pool pays. These include the owners’ condominium fees, resident manager pay, and the management contract. However, there are some ancillary expenses as well, which include unit repairs, painting, appliance repair or replacement. It should also be mentioned that the rental pool does not pay property taxes, insurance premiums, or the mortgage.
The Alberta Real Estate Association defines rental pools in the following way: “A rental pool is formed by a group of investor owners who agree to pool (combine) rental income from all their units and share the expenses of all units. The investors will also share any profit or loss from the rental pool. A rental pool may have its own Board of Directors and a property manager to collect rent, maintain the units and pay expenses. The Board of Directors and property manager for the rental pool differ from the condominium Board of Directors and property manager (although a single property management company may manage both the condominium and the rental pool).”
The following list is an example of how a written rental pool agreement might look. Note: This is merely a model and rental pool agreement terms may vary based on the particular circumstances of a situation.
- Net revenues are paid to the owners on a monthly basis.
- The property management company will prepare or have prepared audited annual financial statements.
- The Agreement is between a property management company and the owner of a condominium unit that forms part of a rental investment pool.
- The owner agrees to abide by the rental bookings made by the property management company.
- The use and rental of the unit will comply with applicable legislation governing hotel accommodation rentals.
- The property management company is responsible for collecting rents, paying expenses and managing the revenues generated from rentals of the unit.
- The property management company will maintain one or more bank accounts for the purpose of collecting and disbursing funds under the rental pool.
The property management company will pay related costs and expenses from rental funds collected, such as maintenance, utilities, valet, laundry services, etc.
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Braden Equities Inc. has been successfully managing condominium buildings in Edmonton since the 1970s. A lot has changed since then, but our commitment to the residents living in each building we manage has not. Contact us today.